Cel-Sci ($CVM), at work on a Phase III cancer treatment, has signed up to borrow up to $5 million as it pursues a $50 million lawsuit against former CRO partner inVentiv Health.
Through a deal with litigation financier Lake Whillans, Cel-Sci can fund its fight against inVentiv, which the company says committed breach of contract and fraud. The pair is scheduled to enter arbitration later this month.
Cel-Sci only has to return the money if it succeeds in the arbitration process, the company said, adding 15% of net proceeds to the repayment amount. If Cel-Sci settles out of court with inVentiv, it will pay back its financier and add 10% of the proceeds or $2.5 million, whichever is greater.
The deal "makes clear to anyone involved in the arbitration that Cel-Sci has the funds to finish the arbitration and go the whole way, if needed," CEO Geert Kersten said in a statement.
Cel-Sci filed suit against inVentiv in 2013, accusing the company of mishandling trial enrollment and delaying the progress of its cancer drug, Multikine. According to Cel-Sci's claims, it was working with PharmaNet to recruit a Phase III study of Multikine until inVentiv bought that CRO in 2011, after which things went awry.
InVentiv has said that Cel-Sci's suit is "nothing more than an attempt to avoid paying an outstanding debt," and the CRO has filed a countersuit seeking at least $24 million in damages from the company.
Since parting ways with inVentiv in 2013, Cel-Sci has recruited CROs Ergomed and Aptiv Solutions to move Multikine forward. Under the agreement with Ergomed, Cel-Sci promises to share development costs and potential profits with the CRO.
- read the statement